America's crushing surge of student debt has bred a disturbing new phenomenon

jjinsf94115/Flickr A college degree practically stamped Andres Aguirre's ticket to the middle class.

Yet at age 40, he's still paying the price of admission.

After a decade of repayments, Aguirre still diverts $512 a month to loans and owes $20,000.

The expense requires his family to rent an apartment in Campbell, California, because buying a home in a decent school district would cost too much. His daughter has excelled in high school, but Aguirre has urged her to attend community college to avoid the debt that ensnared him.

"I didn't get the warmest reception on that," said Aguirre, a health care manager. "But she understands the choice."

America's crushing surge of student debt, now at $1.2 trillion, has bred a disturbing new phenomenon: School loans that span multiple generations within families. Weighed down by their own loans, many parents lack the means to fund their children's educations without sinking even deeper into debt.

Data analyzed exclusively by The Associated Press, along with surveys about families and rising student debt loads, show that:

School loans increasingly belong to Americans over 40. This group accounts for 35 percent of education debt, up from 25 percent in 2004, according to the New York Federal Reserve. Contributing to this surge: Longer repayment schedules, more midcareer workers returning to school and additional borrowing for children's education.

Generation X adults — those from 35 to 50 years old — owe about as much as people fresh out of college do. Student loan balances average $20,000 for Generation X. Millennials, who are 34 and younger, have roughly the same average debt, according to a report by Pew Charitable Trusts.

Gen-X parents who carry student debt and have teenage children have struggled to save for their children's educations. The average they have in college savings plans is just $4,000, compared with a $20,000 average for teenagers' parents who aren't still repaying their own school loans, Pew found. A result is that many of their children will need to borrow heavily for college, thereby perpetuating a cycle of family debt.

Student debt is surpassing groceries as a primary expense, with the gap widening most for younger families. The average college-educated head of household under 40 owes $404 a month in student debt payments, according to an AP analysis of Fed data. That's slightly more than what the government says the average college-educated family spends at the supermarket.

The multigenerational debt cycle reflects a rush to pursue college as a path to middle class security. Roughly 25 years ago, federal policies began encouraging borrowing on a mass scale to cover soaring college costs. Policymakers figured borrowers could afford the debt because college degrees would all but guarantee comfortable incomes.

The reality played out somewhat differently.

Roughly 6 million Gen-X households still owe student debt. Some, like Aguirre, are forgoing home ownership. Others have moved to remote stretches of the country to qualify for loan forgiveness programs. At no point before, experts say, has such a large share of the U.S. population begun their careers indebted.

A student poses with his university loan paperwork from Student Finance England, in this picture illustration taken in London May, 24, 2014 during his examination period for university entry. Early in 2014 local media reported a fall of 17% undergraduate numbers in the first year of the higher tuition fees where, from 2012-13 universities could charge up to ?9000 ($15,147) yearly fees, trebling previous amounts. REUTERS/Russell Boyce

Different Paths

Nathan Anderson received his first student loan in 1991. His time at Johns Hopkins University overlapped with the start of the lending boom: The government was raising borrowing limits, introducing unsubsidized Stafford loans and incentivizing private lenders.

Majoring in psychology, Anderson hoped to become a child psychologist. But after suffering a shoulder injury while playing soccer, he found relief only from an acupuncturist. The treatment led him to study Chinese medicine and become a licensed acupuncturist himself in 2004. He had already racked up $45,000 in college debt; acupuncture school required more.

Now 42 with a blended family of five, he runs an acupuncture clinic in Tucson, Arizona, with his wife, Julie, also an acupuncturist. Combined, their monthly student loans bills approach $1,700.

"More than we spend on groceries and kind of like having a second mortgage," Anderson said.

The student lending boom never fully appreciated how many students might switch major or careers, nor that incomes would stagnate as debt levels rose.

No choice but debt

Part of the problem is that job opportunities can require workers to return to school and borrow at a time in life when savings traditionally became a priority.

In Kansas, the Bigler family lives in the remote town of Ashland as part of a government-backed program to forgive the debt for the father, Jonathan, 54, who in a mid-career switch became a physician assistant.

With a population of 853, Ashland is 50 miles from the nearest Wal-Mart and an hour from hamburgers at the closest Sonic Drive-In. Including the college debts for their three daughters, ages 22 to 27, the Biglers write checks totaling $2,531 each month to repay student debts.